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Divorce proceedings are always fraught with peril, but for high net worth individuals, the financial damage can be even more severe. With so much at stake, these high net worth individuals cannot leave their financial futures to just anyone. They need a divorce lawyer who understands their unique needs and works hard to protect their rights.
The division of assets can be a difficult process in any divorce, and coming to a fair arrangement is never an easy thing to do. When there are a lot of assets on the table, the division of property becomes even more difficult. High net worth individuals often have complex assets, and assessing the value of those assets can be a real challenge. Simply determining how much a business is worth, or finding the fair market value of vested stock options, is something many divorce attorneys never have to deal with.
By finding an expert in high net worth divorce proceedings, those wealthy individuals can better protect their assets, maintain control of the situation and know that they are getting a fair deal. If you are a resident of Scottsdale, it is important to contact an expert in high net worth divorces before you do anything else.
Separate Property vs. Community Property
One of the most important things for high net worth individuals to understand is the difference between separate property and community property. This is a big deal in and out of Scottsdale, and it is a key distinction for any wealthy individual involved in divorced proceedings.
The fair division of marital assets can be particularly challenging when both spouses were instrumental in the building of a successful business or the creation of an extensive stock portfolio. Valuing the business is only the beginning in this case, and the attorneys involved can help determine the extent of involvement each party brought to the table, and how much their individual contributions were worth.
The disposition of assets in a Scottsdale divorce may also involve the distinction of property one or both parties brought into the marriage. In the absence of a prenuptial agreement, it can be difficult to determine which spouse is entitled to what, and that is why the expertise of a quality divorce lawyer can be so invaluable.
The definition of separate property will be helpful in this regard. In the state of Arizona, the law holds that community property consists of:
- Assets that were acquired before the marriage
- Assets acquired through inheritance
- Assets that are traceable to separate property, including proceeds from the sale of a home that was acquired prior to the marriage
- Assets that both spouses agree constitute separate property
Community property consists of property that was acquired by the couple after the start of the marriage. Examples of community property include:
- A family home purchased after the marriage
- Investments entered into after the marriage
- Businesses that were started after the marriage began
- Cars, boats and other vehicles purchased after the marriage
Examples of High Worth Assets to Divide
There are a number of examples of high net worth assets that may need to be divided in a divorce. The family home is one such asset, and properties in Scottsdale can be quite valuable. Determining the fair market value of the family home and developing a strategy for one partner to buy the other one out is an essential first step in the divorce proceedings, but the home is likely not the most complicated asset.
Business assets can be notoriously difficult to value, and even harder to divide fairly. High net worth individuals are often business owners as well, and in many cases liquidating the business is not a smart, or even a possible, option. In order to arrive at a fair division of assets, those business owners need the expertise of an experienced Scottsdale divorce attorney, one who understands not only how to value the business but also how to protect the owner of the enterprise.
Future pensions are often part of high net worth divorce settlements in Scottsdale and beyond, and once again, valuing such an asset can be extremely challenging. It is one thing to divide an existing pension, but quite another to determine the future value of a pension, especially if retirement is still decades away.
Stock ownership and stock options are two more examples of high net worth assets that require expert help and guidance. A high net worth individual may hold both vested and unvested stock options, and it takes real expertise to value those future assets and arrive at a fair and equitable divorce settlement.
Tax Implications and High Asset Divorce
It has often been said that the only certainties in life are death and taxes, and that is certainly true in Scottsdale divorce proceedings involving high net worth individuals. The death of a marriage is always a tragedy, but the tax implications only compound the pain.
There are a number of important tax considerations for divorcing couples in Scottsdale and throughout the state of Arizona. The division of assets can create big tax bills for the parties involved, especially if the proceedings are not handled as carefully as they should be.
During the divorce proceedings, there will be a number of questions that both parties will have to agree on. These key questions include:
- Whether to file a separate or joint tax return in the year of the divorce
- The tax consequences of selling large assets like a business or the family home
- Which spouse will claim the dependent children on current and future tax returns
- The size of the capital gain incurred on the sale of real estate and other marital assets
Divorce proceedings can become even more complicated when one or both spouses is behind on their taxes, engaged in a payment plan with the IRS or currently under audit. In those situations, it is even more important for high net worth individuals to seek the help and guidance of an experienced Scottsdale divorce lawyer.
Divorce is never easy, and the distribution of marital assets is always fraught with peril. For high net worth individuals, however, the stakes are even higher. If you fall into that category, you need to seek the right guidance, and that means choosing a Scottsdale divorce lawyer with the right expertise and the ability to guide you through this difficult process.
Call the Family Law Team at (480) 467-4348 to discuss your case today.
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